We may compensate for carbon tax refits - Hockey

By
Lenore Taylor

Feb. 26, 2013, 7:49 a.m.

The coalition will consider compensating big companies that are part-way through expensive refits to reduce their carbon price liability when the carbon tax is abolished, according to shadow treasurer Joe Hockey.

We may compensate for carbon tax refits - Hockey

The Coalition will consider compensating big companies that are part-way through expensive refits to reduce their carbon price liability when the carbon tax is abolished, according to shadow treasurer Joe Hockey.

Mr Hockey was forced on Monday to clarify a statement in which he had suggested the Coalition would compensate businesses like renewable energy companies that are better off under a carbon tax for their reduced profitability.

''We will consider it on a case by case basis. We have allocated funds under our Direct Action to deal with initiatives that have been under way,'' Mr Hockey said when pressed in Tasmania about the specific case of Hydro Tasmania which has become more profitable after the introduction of the carbon tax.

''If there are individual businesses that will be affected we will deal with them on a case by case basis,'' he said, adding that the carbon tax imposed higher prices on all Tasmanian households and businesses.

But the Coalition's $3.2 billion four-year Direct Action policy, released in 2009, contains no allocation for compensating existing businesses for spending already undertaken.

Mr Hockey later issued a statement saying, ''the Coalition will not be paying compensation for repeal of the carbon tax.''

His spokesman said his earlier comments had been referring to companies like big energy generators, such as coal fired power stations, or major manufacturers, that were part way through refits or technology changes to try to reduce their carbon price liability.

''That's what we could potentially look at,'' the spokesman said. ''Companies that are part way through changes and need to know where they stand.''

Climate Change Minister Greg Combet claimed Mr Hockey had ''admitted that (the carbon tax) repeal would trigger compensation claims from companies which have made investment and business decisions based on a price on carbon.''

''There are numerous companies, investors and shareholders that would be worse off under the Coalition's policy, including renewable energy companies and their financiers. Compensation claims would be massive,'' he said.

Mr Hockey said Mr Combet was ''misrepresenting'' his words and there was no need for compensation because business would be better off.

But Tasmania's deputy Premier, Bryan Green, said the ''money flowing to Hydro Tasmania from the price on carbon is a significant boost to Tasmania's budget which helps pay for hospitals, schools and police'' and demanded details of how the Coalition would compensate for its loss.

The Coalition's Direct Action plan allocates most of its budget to competitive grants paid to businesses and farmers for future emission-reduction plans, proposing to achieve 60 per cent of Australia's pledged emission reductions from storing carbon in the soil on farms. It proposes to spend $10.2 billion by 2020.